NVIDIA Pledges $4B to Boost Photonics in Future AI Data Centers
NVIDIA has unveiled plans to invest a staggering $4 billion into photonics technology firms, Coherent and Lumentum. Announced on March 2, 2026, the investment will be equally divided between the two companies, with each receiving $2 billion. This strategic move aims to hasten the development of cutting-edge optical technologies, which are crucial for the next wave of AI infrastructure.
Photonics technology, which utilizes light to transmit data between AI chips instead of electrical signals, offers significant benefits in terms of bandwidth, latency, power efficiency, and heat management. As AI models continue to grow and data centers expand, traditional copper-based connections are reaching their physical limits. The investments encompass multibillion-dollar purchase commitments and future capacity rights for advanced laser and optical networking products.
“Computing has fundamentally changed. In the age of AI, software runs on intelligence with tokens generated in real time by AI factories for every interaction and every context,” said NVIDIA CEO Jensen Huang. The partnerships will help both companies expand their U.S.-based manufacturing capabilities and support research and development efforts.
Following the announcement, Lumentum’s stock surged nearly 12%, while Coherent jumped 15%. These investments underscore NVIDIA’s strategy to secure its supply chain amid growing component shortages and position itself for the next phase of AI infrastructure development, particularly for “gigawatt-scale AI factories” that will power future AI applications.
Source: CNBC